When e-commerce packages pile up like mountains and truck drivers face prolonged wait times, the bustling scenes at rail freight terminals come into sharp focus. The North American intermodal market is demonstrating strong growth momentum within this transportation chain where efficiency coexists with challenges. Recent data shows uniformly positive performance in October, continuing the year's steady trend—but what's driving this growth, and what industry patterns does it signal?
Record Numbers Across Categories
According to data from the Intermodal Association of North America (IANA), total October intermodal volume reached 1,690,668 units, a 6.1% year-over-year increase. Domestic containers led the growth at 6.9% (729,604 units), while trailer volumes rose 4.1% to 123,371 units. Combined domestic equipment (containers and trailers) grew 6.5% to 852,975 units. International ISO containers reached 837,693 units—a 5.8% increase—making them the month's highest-volume category.
Year-to-date figures through October show total intermodal volume up 6% at 15,822,277 units. Trailers lead annual growth at 13.6% (1,195,757 units), with domestic containers rising 5.5% to 6,645,020. Total domestic equipment grew 6.7% to 7,840,777, while ISO containers increased 5.4% to 7,981,500.
Multiple Growth Factors
Industry observers attribute the expansion to several converging factors. Chronic truck capacity constraints and worsening driver shortages have made intermodal an attractive alternative for shippers. The December 2017 electronic logging device (ELD) mandate has further constrained trucking productivity, accelerating intermodal adoption.
IANA President and CEO Joni Casey describes intermodal traffic patterns as "normalizing" in preparation for the holiday shipping season. She anticipates additional volume growth through year-end, fueled by e-commerce activity and potential tariff increases originally scheduled for January implementation.
Regarding trailer growth, Casey notes it reflects both e-commerce demand and highway capacity shortages, though whether this becomes a permanent trend remains uncertain. For ISO containers, IANA cites rising import volumes as the primary growth driver, expecting this momentum to continue through 2018 barring major trade policy changes.
E-Commerce Reshapes Supply Chains
The e-commerce revolution serves as intermodal's primary growth engine. As consumers demand faster, more convenient delivery, traditional supply chains undergo radical transformation. Intermodal's cost, efficiency and environmental advantages make it ideal for meeting these evolving needs.
The model combines long-haul efficiency with last-mile flexibility—moving goods by rail to inland hubs before final truck delivery. This reduces costs while alleviating congestion and emissions. Automated warehouses increasingly interface seamlessly with intermodal networks, enhancing overall supply chain efficiency.
Trucking Challenges Drive Shifts
America's trucking industry faces mounting pressures. The American Trucking Associations reports over 60,000 driver vacancies, with shortages projected to worsen. An aging workforce, difficult working conditions, and stringent regulations compound these challenges.
Resulting capacity constraints and rising costs push shippers toward intermodal alternatives. By shifting long-haul segments to rail or waterways, intermodal relieves highway congestion while maintaining reliability.
Policy Impacts and Future Risks
Government policies significantly influence intermodal development. Infrastructure investments and streamlined regulations create favorable conditions, while the ELD mandate's hours-of-service restrictions have inadvertently boosted intermodal demand.
However, trade policy uncertainty poses substantial risks. Potential tariffs on Chinese imports—which account for 47% of U.S. container volume—could dramatically impact ISO container flows. Infrastructure bottlenecks at overloaded ports and railways also threaten growth potential.
Sustained Growth Ahead
Despite challenges, North American intermodal markets show continued growth potential. E-commerce expansion, trucking constraints, and environmental concerns will likely drive further adoption. Overcoming infrastructure limitations and navigating trade policy shifts will be critical for long-term success in this evolving transportation landscape.